On October 11, 2019, California Governor Gavin Newsom signed a new law requiring commercial health insurance coverage and payment parity for telehealth services. The law will benefit patients by increasing access and availability to healthcare services, and catalyze the growth of telehealth technologies throughout California. California is representative of a growing national trend of states across the country either enacting new telehealth insurance coverage and payment parity laws, or revisiting their older laws to revise and improve them to better account for the current state of telehealth.
California’s prior telehealth coverage law did not include a payment parity provision requiring health plans to pay providers at the same or equivalent rate providers are paid for identical in-person services. The new bill makes some technical modifications to current law, but most notably creates two new statutes – Health & Safety Code section 1374.14 and Insurance Code section 10123.855. The key changes in the new law are:
These changes were intended to fix statutory shortcomings that confused practitioners and ultimately prevented patients from enjoying meaningful insurance coverage of services delivered via telehealth. A number of other state legislatures are considering similar amendments to their current telehealth coverage laws in order to close these perceived loopholes and give patients and healthcare providers clarity on what medical services are (and are not) covered when delivered via telehealth.
With the enactment of the new California law, approximately 36 states plus D.C. have laws requiring commercial health insurance plans to cover telehealth services, and approximately eleven of those states have payment parity language. We will continue to monitor for any legislative changes that affect or improve telemedicine opportunities.